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Closing Bell With Maria Bartiromo

News/Business. Maria Bartiromo. Analysis of the day's winners and losers in the stock market. New.

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01:00:00

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Virtual Ch. 58 (CNBC)

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mpeg2video

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ac3

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480

TOPIC FREQUENCY

Us 27, Boeing 11, Faa 10, S&p 7, America 5, John Stumpf 4, Washington 4, Aflac 3, Bb&t 3, Intel 3, Volcker 3, Phil Lebeau 3, Stacy Smith 3, Morgan Stanley 3, Garth 3, Pnc 2, Unitedhealthcare 2, Bob 2, Realtors 2, Mcdonnell Douglas 2,
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  CNBC    Closing Bell With Maria Bartiromo    News/Business. Maria Bartiromo. Analysis of the  
   day's winners and losers in the stock market. New.  

    January 17, 2013
    4:00 - 4:59pm EST  

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definitely there for the s&p. after the close tonight, intel reports. the street is looking for profits of 45 cents on revenue of $13.5 billion. the stock today doing well. in fact, it's rallying into the close with a gain of 3%. still have danny huse with me here from devine capital and mr. matthew cheslock what. are you doing with this rally? you've been very skeptical of this rally. >> i'm still very skeptical. we may get a pop from ge. that's a great time to sell. i think everyone is going to be all in if these numbers exceed and we'll have a perfect opportunity >> you think we're topping out here? >> this feels like you go back to '07 and '80, same way, very complacent about what we're seeing in washington and it's too easy not to sell. >> you said you were wary of oil. what do you like here? what would you buy? >> i like -- i want to see what intel reports. i think that's going to be a bellwether. that's going to really tell us about technology, where we're going, innovation, so that's
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what we're watching very closely. >> would set the tone for tonight and tomorrow morning. watch for the intel earnings. thanks for joining us here. the dow is up 88. it will not be a five-year high for the dow but it will be for the s&p. see you tomorrow. here's hour two with maria. >> and it is 4:00 on wall street. do you know where your money s.hi, everybody. welcome back to the "closing bell." i'm maria bartiromo on the floor of the new york stock exchange. a big real on the street today pushes the s&p 500 to another five-year high. the dow also trying to close at a five-year high as well with an 85-point rally in the session, slightly shy of the highs of the afternoon. take a look at how we settle out tonight at 13,596 on the industrial average. volume on the light side. you can see 562 million shares traded here at the big board. nasdaq higher by 18 points and technology is strong. financials strong. s&p 500 up 8.25 points. two key earnings due out moments from now. james friedman of susquehanna
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international group is watching and waiting for the american express numbers, and i'm just getting them right now. i'm getting intel right now actually. we're waiting on intel. 48 cents a share where intel is reporting its eps. estimate for intel calls for a profit of 45 cents a share. alex gonaugh with his eye on intel. 13.5 billion in revenue from intel. 13.5 billion on intel is the revenue and the earnings per share is 48 cents on, like i said, 13.5 billion in revenue. the stock is moving, as you can see, in the extended hours. acting on the heels of the numbers. our market experts are ready to weigh in. michael yosikami joining us and brian peori with henessey funds
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as well. 48 cents a share and 13.5 billion in revenue. what's your take on the intel numbers? >> looks like a pretty good number. exactly what people were looking for, essentially anyway, and there's been more dire concerns out there, you know, the death of the pcs, those worries out there that have beleaguered the stock last year but what we're seeing right now sin tell is still very much in the fight, in the cloud computing fight and in the new mobile fight with their new tablet and smartphone initiatives out there so a pretty good number all in, i would say. >> good number all in, but it's interesting that the numbers actually crossed the wire before the market closed. do you think that that was a mistake, not typical for intel. normally come out after the close. >> should have been after the close. i don't know what happened with them there in terms of coming out too early. >> intel too eager to show the world that it wasn't done from the fight yet. >> what do you want to hear from the conference call tonight in terms of business going forward with intel? >> i want to see how they view
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seasonality, want to hear about the technology road maps and capital investment plans for next year as they continue to try to extend the benefits of more is loss. there's a lot that could come down the pike in terms of them becoming a foundry manufacturer down the line and still a long way for them to go in terms of trying to get a deeper footprint into the smartphone and tablet markets. >> michael. let me get your take on these markets and the earnings period. intel just reported a moment ago, and we're waiting on american express shortly, but this market has been trading up, doesn't want to go down, cheering upbeat housing, jobs data. despite some mixed numbers in the banking sector, is this sustainable? >> you know, i think the market is going to continue to trade up. as you said earlier, not a completely fundamental story, a real federal connected story. intel's numbers are quite good given in n my opinion how bad pc
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steals have been. it's a positive-yard line for the market. interesting to see what american express numbers look like. that will tell us a little bit about discretionary. american express came out and talked about job cuts here a couple weeks ago so we need to see how that plays out. >> isn't it interesting that only 13% of the s&p 500 is trading lower year to date in 2013. it has been a rip-roaring here in terms of equity. do you want new money here or are we two for a bit of a slowdown? what do you think, james james? >> all right. thank you, maria. i was looking at the amex numbers now. would i say relative to this print, and you've got to back out a lot of extraordinary items, these numbers on the revenue side look roughly in line with what we were expecting, earnings side slightly better. >> looking specifically at amex.
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brian, why don't you weigh in here in terms of the broader market. what is lifting this market other than the fed? >> i think you've got some good earnings numbers coming out, and i think that it bodes well for us going well further, you know, higher from here. i think that this is a great opportunity. if people haven't been fully invested, now is a great time to step back into the equity markets. i think you put the risk-on trade here, and i think that we go higher for the rest of the year >> you know, maria, you've got to be very careful. if you're going to put risk-on in an environment where the market is at five-year highs, where fundamentals are great and not okay and where the federal reserve is absolutely not guaranteeing federal reserve action going for the next six or 12 months, you need to be very careful. you've got a drip open. look for dripping in, look for corrections and pullbacks, do it over time because this is
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classic investors mistake. five-year high, people open the paper and it's time to invest and they dump the money at the worst possible time. >> you think that we're due for a bit of the break after all the money having made into equities the last couple of months. i'm not looking for a 20% correction but it's inevitable when the market his 1306 on the dow, we'll have to see how earnings play out over the course of the next 30 days but there will be an opportunity to buy some songs at a cheaper price. >> the vent dealing will be the real driver of the market going down, right? >> we know mobile has been driving everything throughout technology. what do you want to hear out of
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the conference call and how they will capitalize? >> we want to know how they will push technology forward, what they have done historically and what they will continue to do. they are making progress on the mobile side of the market. they have got one of the leading phones now working with motoriala in terms of battery efficiency. they keep making technology better and if you can push into the markets, you can be more of a gloat story. intel technology is essentially the cloud today, and so depending on how those data center numbers work out, we to see now they can push that forward as well. >> you nexted earlier it's what you expected. did pre-announce last week. do we know anything new from this report that you didn't know last week? >> the company is taking actions to reduce their cost struck you're. as the margins go, so should the
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stock. we think that's an encouraging development. >> appreciate your time tonight. see you soon. don't move, anybody. the intel chief executive officer be here and lots to talk about with the numbers we saw and ceo john stumpf is here in the house for an interview you'll see only right here next. we're talking everything from earnings to housing to lending to his stock which is up, 2i the way, 20% over last year. we'll be right back with john stumpf. fortunately we've got ink. it gives us 5x the rewards on our internet, phone charges and cable, plus at office supply stores. rewards we put right back into our business. this is the only thing we've ever wanted to do and ink helps us do it. make your mark with ink from chase.
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welcome back. so where did this rally come from today? bob pisani wraps it all up right now. over to you, bob. >> banks and home builders, but very simple, maria. pretty good volume, 4-1 advancing to the declining stocks. the long-term picture we want to look up. five-year highs on the s&p 500. made it. dow did not make, it by the way, the dow jones industrial average shy of the five-year high. mid-cap, historic high, russell 2000 historic highs and slickials strong for the start of the year. speaking of the start of the year, early to put this up. look, so far the s&p 500 up almost 4%. at this rate somebody wrote to me will be up 110% on the year on the s&p.
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you get it. dow transport, risk on, honeywell, united technologies, all on the strong side. the regional banks had the earnings fifth third, pnc, huntington and a new high for fifth third. back to you. >> bob, thank you so much. financial stocks, of course, leading this market again this year. wells fargo climbing nearly 3% this month alone, after rising better than 20% in 2012. wells fargo chairman, president and ceo is john stumpf who joins me now in a rare and exclusive broadcast interview. welcome to the "closing bell," john. >> thank you. nice to be here. >> thank you so much for joining us. i want to talk first about the broad environment, what you're seeing, because we talk so much here about the challenges as a result of washington and this slowing growth story for the economy. what are you seeing? >> well, 2012 was the year housing really made its
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statement at its back. it's not back to where it was, but surely we can now say housing has turned the corner so that's a good thing for the economy. when housing does well, everything else seems to do well. quite a multiplier effect. in fact, there's been no recovery in this country of size or stability without housing participating or leading. energy is doing pretty well. we see some manufacturing, but to be honest about it, the recovery is still not as strong as it needs to be. there's still too much uncertainty, and there needs to be more clarify for the economy to take off. >> a really important point because i think businesses are, you know, shaping up and are currently in great shape in terms of cash on balance sheets. >> terrific. >> so they have the potential to put money to work, although that uncertainty factor is really keeping them from doing so. >> in fact, corporate balance sheets have never been better. liquidity, cash, we've grown 300 billion in core deposits in four
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years. you know, consumer balance sheets. even though the debt hasn't come down that much because interest rates are so low, the interest carries. the debt service is back to 1998 or 1990 so there's great capacity to invest, to hire, to grow, to buy things, but this uncertainty thing puts a real cloud on things otherwise people would do. they are putting them in abeyance. >> i'm going to get back to that. a real issue. want to get your take on solutions, but you mentioned interest rates and this low interest rate environment. you're putting your bet on growing net interest income. >> correct. >> let me ask you about that. even in this low environment how do you do it? what's the plan? >> you do more deposits, more loans. in fact, last year our net interest income, the difference between what we get on the loans versus what we pay on deposits, an endless margin, dropped 18 basis point but we actually grew net interest income so you do more, and we've dealt with this
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low rate environment before. do i think rates are too low? yes. a lot of monetary stimulus, but we're able to operate in that environment, and it's been a real bargain for borrowers. on the other hand, savers have paid a real price. >> how do you offset that knowing that it's become tougher to make money in banking? >> well, this year we grew revenues by 6% quarter over quarter from a year ago and 6% you took the whole year. almost all of it on the non-interest income side. half of our revenues come from fee for services, mortgage brokerages, other things so we don't only live on the margin, if you will, so think of a company that can produce those kind of revenue numbers with no help from the margin or very little help so this is a company with enormous capacity to help customers and return stuff to our shareholders. >> a lot of times when the analyst community talks about
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wells fargo, they obviously talk about mortgages, talk about a lot of exposure, increasing exposure to mortgage banking compared to rivals. one of the analysts i guess from goldman sachs downgraded your stock to a neutral from a buy citing this greater exposure to mortgage banking. break it down for us in terms of priorities at the bank. we recognize that mortgage banking is incredibly important but is he right? what do you do in an environment where some people question whether or not you've got an overexposure to one part of the business in. >> okay. well, first of all, i don't not only like the mortgage business but i love it. the reason i love it is because our customers love it. two-thirds of americans on homes they have not lost their emotional attachment to own a home and our 30% share there, half of that is an aggregation share. we buy loans from other originators in a corresponding business and help package them, provide liquidity and sell those. our real share is about 15%. 10% of our deposits in the
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country are part of wells fargo so a 10% share there. everybody takes a deposition it and not everybody makes a mortgage loan so 15% is not that outsized. we still have tons of opportunity. as i like to say, this is more than a one-trick pony. we have so many other things going on with the company. we have 84 different businesses. we're number one in small business, middle market. >> autos. >> distribution, love the credit card business and the student lending business and the asset-based lending business. there's tons of stuff going on, and all those other things have also had record years. it might not be as visible because people talk about mortgages, but this is a broad diverse financial services company that, you know, provides services for all kinds of customers. >> so where does the growth come from, the real sizable growth in the coming here's. i don't want to be so short-term oriented. that is sort of the norm on wall street when everyone is looking at estimates. look long term for us. >> sure. >> what's your vision in terms of where the growth comes from? >> first of all, let's take
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mortgage for a second. we still have tons of customers who call us our bank, deposit their money with us and have their checking account and their mortgage some place else so there's still opportunity there. but i think wealth brokerage retirement is a huge opportunity. 10,000 americans retire a day in america, so that's a big opportunity for us. we're undersizing that business. i like the insurance distribution business. i like the small business business, so there's a whole bunch of things that when you have that diversified model,ing does better not quarter over quarter but over the long term. >> we were talking about the social security and raising the eligibility age and lawmakers saying this hasn't been changed, low-hanging fruit in terms of getting our way around debt. speaking of retirement, should social security recipients get it it at 80 as opposed to 67? what's your take? >> i can't pick an age, but i do know this. we have a fiscal and financial
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problem in this country, and i know people have talked about, you know, if you had a family you couldn't live at this and borrow at that. think of this as a perspective. the average american family owes 200,000 on their mortgage and 15 million mortgages in america and took the national debt and split it up among the 50 million homeowners, they would owe 530,000 on their mortgages. if we don't get this thing fixed three years, four years now, 600,000 on the mortgage, 400,000 on the debt. we have problems. we need revenues and expenses. if we can figure that out. we can get away from this cliff and that cliff and pivot to a growth agenda. we're going to grow our way out of this, maria. not going to save our way out or tax our way out, but those things do matter. i'm glad ceos are spending time expressing their thoughts on these issues. >> but we're living cliff by cliff. >> yes. >> it's amazing to me that we haven't, you know, put out real solutions. has this, do you think, become an impediment for business? has it become an impediment for
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your business that all this uncertainty and the fact that we can't make any decisions in washington, even though the corporate balance sheet is quite strong. >> absolutely. what did we talk about in december? nothing but fiscal cliff. it even drove santa claus off the front page. all we talked about. >> that's true. >> now the debt ceiling and then it's sequester and the continuing resolution. we go from this cliff to that cliff, and we don't deal with the problem. if we deal with the problem, there's so many assets in america. we can grow our way out of this. >> let me ask you about getting out of a problem and for many it's regular laying. after the 2008 upset, the banking sector has faced much higher regulation. things are changing quite a bit. we're no longer riding a wave of deregulation, quite the opposite. talk to us about the regulatory environment and how you see it. >> clearly regulations increased. we have dodd/frank with, you know, thousands of pages. let's be honest about it. there were some bad actors prior
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to 2008. i'm all in favor of good solid regulation with regulators who have real teeth and can make things happen. what i don't want to have happen is excessive regulation that stands in the way of us serving our customers. i mean -- >> what's excess? what's one rule that you think is excess? >> i don't know what it's going to look like but look at volcker. if volcker is written poorly or too broadly, it could keep us from serving customers. these 2 million mortgages that we made last year, each one of them got a rate lock. we would say, maria, for the next 90 days we'd make you a mortgage at 3.5%. well, i've got to protect myself some way on that so i buy a hedge to make sure that if it rates go the wrong way i'm protected, i hope volcker doesn't get in the way of that. how about hedging, you know, commodities. i have a brother who farms corns and puts all his input costs in by april. might want to sell some of that crop. we do that or people like us do that. >> right. >> this is good stuff that helps americans. >> and you're not going to do it
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if you're handcuffed in another part of the business. >> absolutely, or more difficult to do it or it becomes unavailable. >> right. >> i'm worried about the flow of credit as opposed to, you know, what regulation does there. >> i've got to get your take on the federal reserve and i know you won't be giving too much away because you've already put your capital plan forward. the federal reserve has to tell you if they are okaying it and if you'll be paying dividends, buying back stock. where are your priorities, givebacks or buybacks? >> both. we want to return more capital. have more capital today than in the history of the company. that's one of the real strengths is the strengths of its financial services companies, and we stand tall in that area. we think that we've earned the right to return more and we've asked for more. >> and you'll know by march. >> we'll know by march. >> john, good to have you on the program. >> thank you very much. >> john stumpf, president and ceo at wells fargo. intel shares on the move. latest quarterly results are out.
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i'll speak with stacy smith, coming up, before we go to break. phil lebeau with the latest on the troubles happening at boeing and how the past can inform on what's next for the 787. stay with us.
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welcome back. check out the move on intel. the chip giant announcing
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fourth-quarter results. jon fortt has been poring over the numbers. what can you tell us? >> gross mar jib came in a point higher than intel projected, at 58% as opposed to 57%. predicting the same for q1. q1, the revenues they are projecting, are a little bit under the consensus. 12.7 billion plus or minus half a billion. they are projecting low single-digit revenue increase for fiscal 2013. gross margin at 60%. $30 billion in capital expenditures, a couple more things really quick. inventories were down more than half a billion dollars. half a billion dollars that intell projected, that's a good thing. head count up by 300 people, quarter over quarter and interestingly the pc client group revenue, that was down 6% year over year, maria. >> john. thank you soich. more on intel's numbers we bring in chief executive officer stacy smith joining us for a first on
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cnbc interview. so good to see you. thanks so much for joining us. >> thanks for having me. >> how would you characterize the quarter? >> you know, the quarter came in as we expected. and, you know, when you kind of get under the numbers and look at the driver for us, what's really happening is that 2012 was a year where we researched our product line across every major business, and we're seeing as we expected just a ton of innovation by us and by our customers, and i think that's really what allowed us to come in as expected and set the guidance that we did for 2013. >> what do you need to do as smaller competitors and competitors are circling around the wagon of intel trying to take market share looking at the device and the tablet market to try, to you know, unseat intel in terms of the leader? >> well, actually, i think we're doing exactly what we need to do. first and foremost for us is our manufacturing leadership, and over the course of the year we not only extended over the rest
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of the industry but that is becoming a more important competitive advantage for us, and it's particularly true in places like phones and tablets. you know. at the beginning of the year we didn't have any products in those. we have leadership that lead in power and performance efficiency as well. >> you've got a shift towards tablets more so and devices and a bit away from pcs. we all know the numbers. there are about 1 billion pcs in the world versus 5 billion or more mobile devices. >> yeah. and actually i think over time it's going to become very difficult to draw distinct lines between the different kinds of devices that compute. you know, we think one of the most exciting things that came out in the fourth quarter were the convertibles. in one mode it's a no compromise pc. you flip it around, and you have, you know, a world class tablet all in one device. do you call it a tablet or a pc?
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for us it doesn't matter. as long as it needs silicon that's power efficient, then it's part of our market, and we have products to go in it. >> i see. what kind of growth are you expecting? i guess after the firm reported earnings today there was some disappointment in terms of the revenue guidance. what kind of 2013 are you looking for? >> you know, we guided revenue to be in the low single digits, and, you know, my expectation is that as we get into the back half of the year we'll see some acceleration in the market, and it will be a combination of gdp and that's pretty consistent with what economists are predicting and our product cycles. a combination of a new book we're bringing to the marketplace and windows 8 and touch coming to the market, is exciting and progress in tablets, that will give us unit
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growth when we get on the back half. >> let me ask you, sir. it appears the results were known to some outlets shortly before the market closed. do you know what happened? why the numbers were released to a certain group of the market and not everybody before the close today? >> you know, we're following up on exactly where in the process that happened. so, no, i don't know right now. >> because you normally, and we were expecting the numbers to come out after 4:00. >> yeah. we're generally one to two minutes after 4:00. >> and instead it was out before the market closed. >> that is correct. >> you don't know what happened? >> still trying to figure out what happens. >> stacy smith, good to have you on the program. thanks very much. >> we'll seep watching. boeing 787s remain crowneded and our own phil lebeau is up next and the stories boeing can learn from the grounding three decades ago.
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bb&t ceo speaks with me exclusively in a couple of moment and find out how long he thinks the mojo continues. back in a moment. [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. ♪ all on thinkorswim. from td ameritrade. ♪ [ male announcer ] some day, your life will flash before your eyes. make it worth watching. introducing the 2013 lexus ls.
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an entirely new pursuit. with multiple lacerations to the wing and a fractured beak. surgery was successful, but he will be in a cast until it is fully healed, possibly several months. so, if the duck isn't able to work, how will he pay for his living expenses? aflac. like his rent and car payments? aflac. what about gas and groceries? aflac. cell phone? aflac, but i doubt he'll be using his phone for quite a while cause like i said, he has a fractured beak. [ male announcer ] send the aflac duck a get-well card at getwellduck.com.
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welcome back. the faa is grounding all boeing 787 dreamliners but the stock made a comeback. let's get the latest developments from phil lebeau. over to you, phil. >> reporter: we're in the phase of this story with the dreamliner where we're waiting for more information, particularly from the faa. here's what's going on right now. investigators for the faa are comparing the batteries from the two incidents, the one in boston and the one this week from japan. seeing what similarities might exist between the batteries that failed. meanwhile, boeing is working with the faa on a possible solution in terms of checking these batteries. it's too early to say that this will be enough to get the dreamliner back in the air, but that's the direction that boeing is working. by the way, the batteries are made by a japanese firm. since last monday, the previous monday the 7th, the sales are down 7% and boeing shares a bit
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of a comeback after being under pressure, this as a number of industry experts speculate that perhaps the faa might have moved a little too quickly in grounding the dreamliner. >> boeing has always been candid. they have never been withdrawn in discussing the facts. i don't think boeing agrees with the faa as to the severity of this problem. i think the faa is overreacting to the severity of the problem, but nevertheless it's going to get resolved i think rather quickly. >> so, again, at this point, boeing is working with the faa trying to see if they can come up a solution to get the dreamliner back in the air. maria, it could happen as early as next week. again, we're a long ways from the faa signing off on some solution. >> what kind of an impact is this going to have on the company's financially, phil? i mean, this obviously is a major blow. what do you think this is going to mean in terms of financials? >> if this only lasts five or six days, not a huge impact.
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the real impact is on the production schedule. if that's ever altered and they have to slow from making five to month to ten per month, if that changes and they have to slow down, that's when the financial impact really starts to mount. >> the last time a specific aircraft model was grounded was back in 1979 after a mcdonnell douglas dc-10 crashed in chicago killing everybody on board and two people on the ground. the crash exposed some decline flaws, and the faa ground it had until some modifications were made. the circumstances are obviously different, that a net result that a plane was crowneded, was the same. h >> it took mcdonnell douglas a long time because of the horrific images of the crash. the grounding lasted for more than 30 days. i can guarantee you investigators as well as airlines have loads of data from
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those batteries, from the flight data recorders, that they are going over right now so the level of investigation is much more sophisticated, and that's why the grounding is likely not to last as long as what we saw back in 1979. >> so, why won't other airlines cancel their orders? >> reporter: they are not cancelling because where are they going to go, maria? >> that's true. >> reporter: if you're in line to buy a plane for maria airlines and expected to get one in 2010 and you're not happy, what would you do, leave your order with boeing and go over to airbus? you're going to be at the end of the line there and you won't get it until 2018. they are hoping that this gets resolved and that by 2014, 2015, you get your aircraft, and it's working as it's supposed to work. >> boeing says they won't stop production. will it cost more to stop than to fix the planes later? if that's what ends up being needed. >> it depends on what they have to do, maria. listen, if this is a design flaw and they have to go in and change the manufacture process, that's a huge issue for boeing.
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but if it's not, if it's something where it's a testing fix or a software next, then this is something boeing can get by relatively quick. >> i tell us how the unions come in there and what the changes of a strike? does that make things more difficult? >> too early to know how it would impact production. won't see an impacimpact. the engineers union has made its final and best offer to management of boeing. if there was some way that this did not get resolved and we did see a strike, that would slow things down. boeing wants to get this plane back you. they want to get this thing resolved with the engineers as quickly as possible. those are the guys who understand the dreamliner. >> we'll leave it there. phil lebeau, thank you so much.
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focusing on financials. more big banks reporting earnings and then pp & t jumping and we'll hear about the staying power. go-go retail market that's driving his friday morning. some wall street pro has previewed tomorrow morning's consumer sentiment rart. back in a moment. to watch it for us. thank you so much. i appreciate it. i'll be right back. they didn't take a dime. how much in fees does your bank take to watch your money? if your bank takes more money than a stranger, you need an ally. ally bank. your money needs an ally. thor gets great rewards for his small business! your boa!
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welcome back. morgan stanley capping off a big week of bank earnings tomorrow. bertha coombs with a preview. bertha? >> reporter: maria, going to hear from state street and sun trust tomorrow but definitely the last of the big banks. morgan stanley is going to be the big headline. the vest bank is expected to post earnings of 27 cents on $7 billion in revenue, though the recent mortgage settlement will weigh on net profit. mortgage regulatory settlements were big themes in today's earnings, bank ever america's fourth quarter profit fell 3% and bank of america weighed down by declining revenues in its consumer banking and citi revealing the federal consumer watchdog is reviewing its retail
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bank but top banking analysts like mayo liked what he heard in terms of what they are doing to revamp. he's upgrading the shares of sitty to a brice target. reach nage fared pretty well, pnc financials up after revenues topped financials and writing off fewer loans while bb&t setting aside lower reserves for bad loans and saw profits up 29% year over year. maria? >> thanks, bertha. shares of regional bank bb&t gaining 5%. a continuing surge, increased the mortgage monking revenue. joining mow now is kelly king, chairman and ceo of pb & t corp rage. good to have you on the program today. how are you? >> good.
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>> great. do you expect the market gaining momentum in 2013? >> well, so i think refinancing will subside some as we head through '13. obviously it breaks it to the low and will stay low so there's people who can refinance. you're exactly right. new purchase activity is picking up actually relatively quickly. we just saw some very good housing data in the last couple of days so what we think is going to happen is refi will subside. you know, new purchase activity will pick up, and also we are doing a lot of things to broaden and diversify our revenue stream from mortgage. you know, we are expanding our corresponding banking network and adding new producers and we've run them relatively recently through mergers, so we're pretty optimistic going forward, not that there might be some slippage, but it won't be as dramatic as many people
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think. >> how are you changing the business to deal with the realities? >> well, so i think as you move through the period from, you know, heavy dependence on refi to new purchases, you know, you have to frankly spend a lot more time marketing, out calling on the realtors, calling on the broke errs. you want to be positioned in the marketplace so that when someone moves into town or decides to move across town and they think about buying a new house, you know, we're the first person that they call. and so, you know, we have been expanding our mortgage producer base. we've been expanding our mortgage marketing outreach to the realtors and the brokers, and then a big part of our business is correspondent business which is a national skill business, and we're expanding that base, both retail and wholesale, and that allows us to have a much broader penetration. effectively when times get tougher or, you know, what i've learned over the years is you just have to work harder, and that's exactly what we're doing. >> well, how do you deal though
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with something like this low rate environment which, of course, has been trouble for so many companies throughout your industry, this net interest margin and the low rate environment? you're feeling it and everybody is telling it. what do you do to offset that? >> well, it's a really big challenge. first of all, i'm in the minority, i think, but i believe that the -- the yield curve will steepen some as we head through the course of this year. there's just been too much monetary stimulus put into our system to presume that, you know, all interest rates are going to be flat for the next 24 months. i think by the end of the year rates will be rising, but even so, as rates stay low and margin pressures are on, you know, there are a lot of things we do. we look on the liability side at reducing cost in terms of our liability structure. we look at improving the mix of liabilities, having more non-interest bearing deposits. for example our non-interest bearing deposits grew 25% on an
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annualized basis and we look at redistribution on the asset side so even though the rates are low, if you redistribute in terms of the types of assets that have higher rates, higher margins, for example, maria, we have a really good specialized lending business that is doing extraordinarily well, and it has much higher rates than, you know, prime commercial and industrial properties. and so diversification is really an important key in all parts of banking, and that's why we feel very confident as we go forward. even if rates stay low, which i don't think they will, but if they do without diversified revenue stream, we're going to do very well, even in that environment. >> what about the broad economy? you've got to operate your business and focus on growth regardless of what's happening around you, but you've expressed concern about the broad economy. how are you looking at 2013 now? >> yeah, so, as you know, during the course of 2012, we remained very, very concerned about kind of the macro issues, and i'm
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really more concerned about the macro issues within the united states. there's certainly some spillover effect from the eurozone, et cetera, but today our issues are squarely within our own boundaries, so as we look at 2013 it's interesting, so there is a huge amount of pent-up demand in the business space. businesses have not been investing in plant and equipment, adding employees the way they need to for the last seyfert years. upon talking to them, and i have a chance in my business to talk to a lot of them, they are ready to invest. they have been waiting for some of the uncertainties to subside. you know, we get through the election. they may or may not have liked it but at least it's certain now. the fiscal cliff was quote, unquote avoided. now we have the debt ceiling issue so there's some lessening uncertainty but still a lot of uncertainty. so, as we think about '13, i believe if we get some kind of just halfway reasonable leadership out of washington and deal with the debt issue and
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begin to deal with our fiscal deficits. >> right. >> i think, maria, you could see a real positive lift because people are ready to invest. they need to feel some kind of inspiration, and i think they are ready to invest. >> that's what we're hearing across the board. real quick, you going to raise your dividend this spring? >> well, as you know, we have to go through the process, and we have to wait to see what the fed says, but i'm optimistic. i can't speak for the fed but i'm personally optimistic. >> we'll leave it there. mr. king, good to have you on the program. >> have a good day. >> and to you. chairman and ceo of bb&t. didn't hold on to the triple-digit gains. does that mean we're setting up for a pullback tomorrow? our panel of wall street pros will give you a leg up on what's going to move your money tomorrow. don't miss it. ♪ ♪ [ male announcer ] you don't have to be a golf pro to walk like one. ♪
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welcome banck. with 30 seconds on the clock, our guests are going to tell us what to be prepared for tomorrow. good to see everybody, thank you for joining us. scott, you're up. 30 seconds on the clock. what are you watching? >> well, i think the big thing tomorrow is going to be the sentiment number. not expecting it to be positive. i think it will be fairly
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negative. with everything else that's been coming out. i don't think that the ge num r num per is going to be that great, either. with morgan stanley, if you strip away some of the news that's going to be impacting the earnings that we know about, add on state street, which we expect to beat and sun trust, i think it's going to give a nice mixed market. the financial sector, we think, is going to lead. >> thank you very much. yeleni, you are up. 30 seconds on the clock. >> we'll be watching consumer confidence to see where the fiscal tightening has already taken a toll on consumers. many people might not have even realized that their take-home pay has shrunk before they receive their first paycheck of the year this week. so, we might see a rebound in the university of michigan index. after all, a fiscal deal was reached, however, the increase in confidence will likely be short lived. many more frequent consumer confidence indicators have
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already deteriorated in the beginning of january. >> all right, we'll watch that, as well. last but not least, t., you're up. 30 seconds on the clock. >> maria, i think you'll see consumer sentiment improve as your earlier guest just mentioned, but i believe it will be short lived. stock markets around the world are getting overbought, not only on short-term but also more medium-term time frame. so, as we go into the debt debate ceiling, i think we're vulnerable for a selloff here. i do like areas in japan as well as china, though, if you have to own stocks. those have been in areas that have underperformed. we still like the gold mining stock areas, as well, as we find that's a good hedge against an inflation outcome. >> all right, we'll leave it there. thank you, everybody. really appreciate your time. we'll watch those stories. see you soon. up next, my thoughts on a pro poll sal by a group of ceos to raise the eligible ability for social security and medicare. that's up next. stick around.
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overmany discounts to thine customers! [old english accent] safe driver, multi-car, paid in full -- a most fulsome bounty indeed, lord jamie. thou cometh and we thy saveth! what are you doing? we doth offer so many discounts, we have some to spare. oh, you have any of those homeowners discounts? here we go. thank you. he took my shield, my lady. these are troubling times in the kingdom. more discounts than we knoweth what to do with. now that's progive.
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health care expenses. medicare, medicaid and social security. but so far, very little talk from our lawmakers about cutting back on spending in these areas. so, now business leaders are taking a stand. a group of ceos sent a letter to lawmakers to push a plan forward that gradually raising the eligibility age for social security to 70 years for both social security and medicare. social security payments are now given at age 67, while medicare currently gets their benefits at 65. the ceos are not saying those currently at those ages would lose the benefits, but to make a change that will impact younger citizens in their later years. before we hear the howls from those that say this is unfair and hurting the elderly, it's important to remember what the reality was, when social security was first introduced back in 1940. the eligibility age was 65. but the life expectancy in the united states was just about 65. in fact, for men it was less than that. now? for men, it's 76. and women,